I can really feel the pain you experience as a home buyer in today’s competitive market. It’s frustrating when you rush to a property right after it gets listed just to find out that other buyers already submitted offers above list price.
If you want to buy in this crazy seller’s market you have to be patient, prepared, and work with a Realtor who knows how to win. And one more thing, you have to set realistic expectations, because you may not find the perfect home you dreamed about.
Here are 5 facts about today’s real estate market:
Fact 1: Most Competitive Price Range
Not every price range is competitive. Most homes under $400,000 sell in less than 30 days. That’s where most first-time buyers compete. It is the seller’s market everyone talks about.
If you can afford more than $400,000 you will have a much larger selection. Homes valued over half a million dollars stay on the market for more than 100 days in average. It’s clearly a buyer’s market for luxury homes.
Fact 2: Rising Home Values
As the number of new listings added to the market has not changed for years, and more buyers are looking for a place to live, home values will continue to increase.
I expect the average sales price to go beyond $240,000 in June or July. That’s more than $10,000 higher than a year ago.
Fact 3: Higher Interest Rates
As the economy is booming interest rates will increase. The Federal Reserve promised to raise the federal funds rate by a quarter percent each quarter. Mortgage rates will follow. They are already up by almost half a point since the beginning of the year.
This means higher monthly loan payments for borrowers and lower affordability when you buy.
Fact 4: Lower Quality Homes
I’ve noticed an increasing number of homes listed without any upgrades. Home owners have become reluctant to invest money on improvements when buyers compete for their property.
If you decide to purchase an outdated home, you must consider the extra cost. There will be less competition for these homes, as most buyers don’t want to rehab a property before they can move in. This may present a great opportunity for buyers who don’t mind getting their hands dirty.
Fact 5: More Stress
House hunting is more stressful than ever. That’s why you need an experienced Realtor on your side. Someone who can guide you through the competitive house hunting process.
Your agent must be available to show homes at a minute’s notice, right after they hit the market. Most importantly, your Realtor must coach you to write knock-out offers to win a bidding war.
